Rio Tinto to Boost Iron-Ore Output in Australia

Miner Bets on Strength of Demand From China

SYDNEY—Rio Tinto aims to spend roughly US$2 billion to increase its annual iron-ore output in Australia about 25%—less than half the originally estimated amount.

Although the mining company will take longer than planned to reach its long-held target of producing 360 million metric tons a year, the move represents a bet on demand for iron ore from China. The economy of China, which accounts for about 60% of the world's seaborne trade...